What does the term ‘Obligee’ refer to in the context of a bid bond?

In the context of a bid bond, the term 'Obligee' refers specifically to the entity that requires the bond. This is usually a project owner or a governmental authority that is soliciting bids for a construction project. The obligee is protected by the bond, as it ensures that if a bidder wins the contract but fails to proceed with the project or fulfill their obligations, the obligee can claim against the bond to cover potential losses.

This role is crucial in the bidding process as it provides assurance to the obligee that the bidder is serious about their proposal and is financially capable of completing the project if awarded the contract. By requiring a bid bond, the obligee mitigates the risk of non-performance by the contractor, thereby encouraging responsibility and accountability among bidders.